South Dakota inventionINDEX July 2026: 1.09% (A+ grade)

The inventionINDEX measures innovation output by comparing GDP growth with patent production growth.

Anything over C grade is positive sentiment; anything under C is negative outlook/sentiment. Using that sentiment, it is possible to observe trends over time, and also compare states/countries. In doing so, we can predict which states have the best chance to recover economically from the pandemic (or any other economic incident that may occur).

Historical South Dakota inventionINDEX Scores

The South Dakota inventionINDEX score for the past 12 months is shown in the table below.

The South Dakota inventionINDEX reached a score of 1.09% in July 2026, earning an A+ rating and continuing a strong upward trajectory in recent performance. This latest evaluation matches the high-water mark set in May 2026 and builds upon June 2026’s solid 1.08% score, showcasing sustained momentum for the state’s innovation ecosystem. The recent surge is particularly notable when contrasted with early 2026, where the score briefly dipped to 1.02% with a C+ rating in January before climbing back above the 1.07% mark throughout the subsequent spring and summer months. Overall, the first seven months of 2026 have produced an average index score of approximately 1.07%, reflecting a remarkable consolidation of inventive output and technical capacity across South Dakota.

Taking a broader view across the 60-plus months of historical data provided, the July 2026 score of 1.09% sits comfortably above the multi-year monthly average of 1.05%. Throughout this extended timeline, the index has experienced distinct structural cycles, ranging from a historical peak of 1.14% in September 2024 to a low of 0.96% in February 2023. The current strength demonstrates a full recovery from a relatively subdued period in 2025, during which the index averaged 1.03% and experienced a slump down to 0.97% with a D rating in October 2025. By maintaining an A+ tier across four of the past five months, South Dakota has reaffirmed its ability to bounce back from temporary contractions and re-establish upper-tier metrics.

Achieving top-tier grades such as A+ and A delivers substantial positive outcomes for South Dakota’s economic and technological landscape. High inventionINDEX scores signal robust intellectual property creation, efficient research pipeline execution, and optimal conditions for technological commercialization. These elevated marks serve as a powerful signal for external venture capital, encouraging strategic corporate partnerships, institutional investments, and talent acquisition. Furthermore, elevated ratings reinforce local business confidence, enabling regional entrepreneurs to secure favorable financing terms and scale novel inventions with lower perceived risk.

Conversely, lower scores and deteriorating ratings carry notable negative implications for regional development and competitive positioning. Drops into the D range, such as the 0.97% score in October 2025 or the historical low of 0.96% in February 2023, reflect systemic hurdles such as reduced patent filing activity, supply chain disruptions, or capital stagnation. Prolonged periods of lower grades can deter prospective investors, slow down private enterprise research expenditures, and cause high-skilled innovators to migrate toward higher-performing regional hubs. Therefore, maintaining scores at or above the 1.08% benchmark remains vital for long-term technological leadership and economic resilience.

Discussion:

In July, the South Dakota inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the upward trend for the year. This is in contrast to the prior 12 months, which experienced a slight downward trend.

As the economy continues to stabilize in the post-pandemic era, it remains uncertain whether any backlog of applications still exists or if the department has returned to normal processing timelines. The inventionINDEX could also be affected by lingering consequences from the pandemic, such as company closures, reduced workforces, and limited R&D capabilities, which may still be impacting current operations.

Learn More:
Are you thinking of patenting any of your bright ideas? Did you know your research work could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? To find out more, please check out our free online eligibility test.

Swanson Reed’s South Dakota office provides R&D tax credit consulting and advisory services to Sioux Falls, Rapid City, Aberdeen, Brookings and Watertown

Feel free to book a quick teleconference with one of R&D tax specialists if you would like to learn more about R&D tax credit opportunities.

Who We Are:

Swanson Reed is the largest Specialist R&D tax credit advisory firm in the United States. With offices nationwide, we are one of the only firms globally to exclusively provide R&D tax credit consulting services to our clients. We have been exclusively providing R&D tax credit claim preparation and audit compliance solutions for over 30 years.

Swanson Reed hosts daily free webinars and provides free IRS CE and CPE credits for CPAs. For more information please visit us at www.swansonreed.com/free-webinars or contact your usual Swanson Reed representative.